Digital nomad and tax?

[Jean Dupuis]

Hello,
for an european digital nomal who change his country every 3 months, who make make money only only with an offshore company : should it pay some tax somewhere?

Thank by advance.

 

[laurie]

Yeah, even if you change country every 3 months.
Of course depends the country reside‌ and the country you do business.

 

[Jean Dupuis]

Thanks for your reply,
I stay mostly in Asia and south America,
and my business‌ is in Europe.

 

[laurie]

Well the problem keep being the same we need the countries. If you are not‌ ready to disclose them you won't get point full help.

Every country have different laws.‍

 

[Jean Dupuis]

The thing is every year i don't have the same routine, but i stay frequently‌ in Peru, Argentina, Indonesia, Thailand..

 

[laurie]

It's likely you will be tax resident in the last country where you have been‌ tax resident AND/OR your country that is the centre of your family interest/financial interest but‍ as you don't want to disclose them we can't help you.
If you don't want⁠ to give details none will be able to help you, I can say it in⁤ Spanish or in French doesn't matter we will still not be able to help you.⁣

 

[Jean Dupuis]

Can we talk by inbox?

 

[negon]

As far as I remember from most European countries tax regulations.. if you don't resident‌ in any country nor your home country more than 180 days you don't liable for‍ tax anywhere??

 

[laurie]

Nah in France, for example, you are tax-resident if the center of your family interest‌ or the center of your business interest are there.

Also there is another problem when‍ you were tax resident and you want to change your residence to "nowhere".

Ps :⁠ I tried to send you a PM but I don't think I can.

 

[negon]

As long as you are not a citizens of France and don't live there any‌ loner than 180 days a year it should work, this is how it works for‍ instant in Germany, Spain, Scandinavian and other EU countries.. not sure how it is in⁠ France..

 

[NonameNomad]

I'll have to do research on this, but auric⁤ doesn't that non tax rule only apply for income tax?

 

[negon]

Yes but under normal conditions your income in the offshore company will be taxed as‌ personal income regardless if you keep the money in the corporation or not!

 

[GrumpyMess]

I would like to revive the topic. If a person cut all ties with his‌ home country, get a residency (but not tax residency) in any popular country (UAE, Malta,‍ Cyprus) to give for banks, and doesn't live anywhere more than 180 days, this would⁠ be a reliable option not to pay taxes anywhere?

This way he can't provide a⁤ TRC, but it seems he doesn't need one, either.

 

[Larin]

Although the original topic has lots of misinformation, laurie's point about everything being dependent on‌ the countries you visit/do business/citizenship is correct. There are just too many factors to say‍ one way or another. The simplest case is that of US citizens who must file⁠ (and potentially pay) taxes regardless of where they live.

The 180 day rule is really⁤ a silly number that often gets thrown around, but is largely irrelevant in most instances.⁣ For example in the UK you can be a tax resident by spending as little⁢ as 16 days in the country. It is true however that if you do spend︀ 180 days somewhere, you are most likely a tax resident there. The reverse does not︁ follow. It does not mean that if you do not spend 180 days anywhere, that︂ you are also a tax resident of nowhere.

 

[GrumpyMess]

This is a special‍ case. I mean the case when a person does not fall under the criteria of⁠ a tax resident in any country of the world, this will not create problems in⁤ the future?

 

[CyprusLawyer101]

You will eventually need a place of tax residency to operate effectively, with banks etc.‌ In theory it is possible to achieve tax residency nowhere but practicalities will force you‍ to obtain tax residency somewhere, unless you pursue an unconvetional lifestlyle like working only with⁠ crypto for example.

 

[Larin]

That depends on how⁠ much this individual is tied to the financial system and how much fraud by omission⁤ they are willing to commit. I refer to the fact that every bank requires you⁣ to keep an up to date address. Chances are if they tell them that you⁢ live nowhere they will close down your account. A willing/private bank might persuade you to︀ put down at least some address.

It is much cleaner to establish residency somewhere. A︁ low/no tax jurisdiction perhaps if taxes is a priority for you.

 

[Mike Forman]

This will create problems⁠ if your country of residence is a country that's agressive to claim tax, such as⁤ in EU.

Each country has different laws and enforces those more agressively than others.

What is key is :
1) you are not registered anymore in your country of citizenship,⁣ this means your address in the register will indicate your address of residence in the⁢ other country, also on your ID. If you apply for a new passport you will︀ also do that in the country of residence through the embassy or consulate (that often︁ requires proof of residence by registration proof and residende permit / long term visa)

2) you have no more family ties and assets nor any bank account or any income︂ from your in your country of citizenship. This is not a clear requirement but any︃ asset or income will give tax authorities the opportunity to prove your ties with your︄ home country and consider it your permanent address (since the other periods you are just︅ travelling)

3) you should be able to provide the proof you lived abroad by providing︆ : rental contracts, spending in supermarket (by your local credit card, definitely not by a︇ credit card from your country of citizenship), gym, etc.. A tax certificate also could be︈ asked.

Every situation and risk assessment is different, nevertheless if you want to be safe,︉ make sure ALL ties are cut with country of residence, get a residence in a︊ low tax country that doesn't tax foreign income and change your residence in your citizenship︋ country to that location. Rent a (cheap) place there and spend some time there (so︌ at least you can show you entered once a year) and most time travel around︍ as a nomad.

You need to have a residence and have a permanent address somewhere︎ and if you don't have then it's assumed your permanent address is in your country️ of citizenship. Even you are not there or less than 183 days, they still can‌ come after you and tax you.

 

[GrumpyMess]

I mean tax residency, but not residency⁠ in meaning of permanent address. There are many countries where you can become a resident,⁤ but it's not full tax residency if you don't live there for a certain amount⁣ of time.

That was the︃ plan

I do not see any particular risk if the payment︆ is made by card from a citizenship country, because that even more confirms that you︇ spend and live abroad. There may be problems if they ask for a tax certificate.︈ It is believed that it is not necessary if all the ties are properly severed.︉ But then you can get a situation where there is no full tax residency in︊ any country. That's the question, how reliable it is

 

[Mike Forman]

The payment is made by the card of your country of citizenship meaning your wealth‌ and bank is in the country of citizenship hence your permanent address is in there.‍ You don't have to convince me that this will be be seen as this, you⁠ can explain it to the tax authorities.

Tax residence is useful for the country you⁤ have it obtained from, it has little value to your country of residence if you⁣ didn't break ALL ties. Unless you really can proof you live in that tax residence⁢ country, you paid taxes there, you receive your income there,.. Beside checking local tax laws︀ of your citizenship country and DT treaties some common sense gets you a long way.︁ Living somewhere as a resident is not so hard to understand : most of the︂ time you are living there, you pay local taxes if you have income, you spend︃ as a resident on groceries, rent, electricity, restaurants, gym and you use local bank accounts,︄ credit cards (or at least definitely not from your country of citizenship).

Anything else is︅ a roll of the dice, maybe you are lucky maybe you won't, that's why everywhere︆ the same advice is given, cut ALL ties with your country of citizenship, beside the︇ fact you eliminate the risk being taxed by country of citizenship you are off the︈ radar there since they have no idea about your income, assets, location etc